A quick visual – comparing the budgets for economic development and education

The North Carolina House and Senate leaders are now negotiating a final state budget. It’s likely that the end result will be significantly different from Governor Cooper’s recommended budget for 2017-2019, which was released in March. Some of the largest gaps between the budgets of Cooper, the House, and the Senate are in economic development and education. Below, we highlight a few of these differences.


Environment, Legislature

Quick hit: Renewables bill a “fundamental shift” in the state’s energy policy”

(Photo: Creative Commons)

This is a developing story and will be updated this week. This post has also been updated with comments from Duke Energy.

I t’s a strange day indeed when the  Americans for Prosperity, Duke Energy and the NC Sustainable Energy Association support the same bill.

But that’s what happened in the House Energy and Public Utilities Committee today, which introduced a new version of HB 589 — 20 pages of dense jargon that only a utility lawyer could love. While there’s still a lot of deciphering of the bill language to be done, essentially the measure would lift several restrictions on the proliferation of solar power in North Carolina while still protecting the utilities’ bottom line — sometimes at the customers’ expense.

Rep. Dean Arp, a Republican from Union County, co-sponsored the bill. “This is a fundamental shift in energy policy in North Carolina,” he told the committee, cautioning, “It’s a very, very complicated bill.”

“It’s a major step forward in energy policy,” said Rep. John Szoka, a co-sponsor and Cumberland County Republican. “It will make sure North Carolina remains competitive in the global economy, and is a leader in renewable, reliable cleaner solutions.”

The most striking provision would legalize third-party leasing of solar power, with utility commission approval. This would open the marketplace to small solar providers to provide rooftop systems. The bill’s success could be instrumental in a court case currently being weighed by three judges on the state appellate court. As NCPW reported in March, NC WARN and Duke Energy are at odds over the nonprofit’s right to sell or lease — depending on the semantical argument — solar power, even in minute amounts. The judges have yet to rule on the case.

Their decision could be irrelevant if HB 589 becomes law. As long as NC WARN gets utility commission approval, it could continue to sell power via a very small, 5.25-kilowatt system on the roof of Faith Community Church in Greensboro.

Under Szoka’s proposal, the solar developer would own the solar panels and lease them to the homeowner or business owner for a monthly fee, as long as the fee is not directly tied to the amount of electricity generated by the solar panels. NC WARN was charging the church based on electricity usage. The property owner, in exchange, will get electricity from the panels, which will reduce the power bill from Duke Energy.

Charlotte-based Duke Energy supports the proposal because it’s structured as a financing arrangement, not as a direct sale of electricity to a Duke customer by a third party, said Duke spokesman Randy Wheeless. Duke customers have had a similar leasing option in South Carolina since 2015.

Similar third-party provisions were floated in a bill in 2015, but even with bipartisan support, the legislation died in committee and never made it to a vote.

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agriculture, Environment, Legislature

House reallocates $250K from rural grant program to “protect” rural areas from EPA


Many storefronts in downtown Ahoskie are vacant or dilapidated. Rural grant programs can help small towns rehab the buildings, revitalize the area and create jobs. (Photo: Lisa Sorg)

Ahoskie, population 5,000, is nicknamed “The Only One,” because it is the only such named town in the world. Located in Hertford County, Ahoskie has seen better days, with its downtown revitalization occurring in very small steps: A coffee shop here, a theater there — and crumbling buildings in between.

Rep. Chris Millis sponsored an amendment to the House budget that would siphon $250,000 from a grant program to revive rural areas like Ahoskie and then funnel it to the Department of Agriculture in order to sue the EPA.

The Agriculture Department could use the money to hire outside counsel to fight the federal Waters of the United States rule, which clarifies the types of waterways that are regulated under the Clean Water Act. These include streams and wetlands that contribute to “navigable waters” already under CWA jurisdiction.

A Republican, Millis represents Onslow and Pender counties, both strongholds for industrialized hog and poultry farms. Those farms could be subject to stricter environmental regulations if their runoff reaches waterways regulated under WOTUS.

“We have to protect rural North Carolina,” Millis said in defense of his amendment. “It’s a federal land grab.”

Downtown Ahoskie (Photo: Lisa Sorg)

But the rural grants program, housed within the state Commerce Department, provides building renovation and economic infrastructure grants for job creation. Local governments in Tier 1 and 2 counties, among the state’s most economically distressed, can apply for money to renovate or demolish buildings or to upgrade their infrastructure. Millis did have other ideas for vacant, dilapidated buildings. In an earlier House ag appropriations meeting, he suggested amending the budget to fund “urban warfare” training for law enforcement, using these structures. The amendment failed.

While some buildings can’t be salvaged — and are eligible for demolition grants — others have value in their new lives. earlier this year, the town of Newton, population 13,000, received a $70,000 grant to renovate a vacant building into an Urgent Care center. The closest similar facility is a 15-minute drive away, according to the town website.

The House budget had appropriated $3.7 million for the rural grant program, plus another $2 million or so in transfers from an industrial fund.

Many conservatives and rural residents oppose WOTUS, including Agriculture Commissioner Steve Troxler.

However, the agriculture department didn’t request the money, said Rep. Pricey Harrison, a Democrat from Guilford County. And besides, she noted, in February the Trump administration indicated it would roll back the rule. It’s also likely to get hung up in the courts.

For these reasons, Rep. Chuck McGrady, a Republican from Henderson County, called the appropriation to the department “not a wise use of taxpayer money.”

“We don’t know what Trump’s going to do,” replied Rep. Pat McElrath, a Republican representing Carteret and Jones counties. “We’re erring on the side of caution.”

The House Agriculture/Natural Resources Committee didn’t include the appropriation in its part of the budget. The Senate version transfers more money — $1 million — from the NC Department of Environmental Quality, apparently as payback for the agency withdrawing from the lawsuit, filed by the previous administration.

Environment, Legislature

Sen. Cook complains about politics trumping science, then votes for leachate bill, backed by no science

Photograph of Senator Bill Cook of coastal North Carolina

Sen. Bill Cook, who represents eight coastal counties, said politics, not science, is influencing the Marine Fisheries Commission. (Photo: NC General Assembly)

The Senate agriculture and environment committee introduced a blizzard of last-minute, controversial amendments to a bill this morning — including one that state regulators had not even reviewed.

The NC Department of Environmental Quality “still has issues with” the Senate version of House Bill 56, said Andy Miller, DEQ’s legislative director.

One Senate amendment would strike language requiring facilities to notify the public whenever any amount of untreated wastewater is spilled into lakes, rivers and streams. Current law requires notice when the amount is 1,000 gallons. The amendment essentially maintains existing law.

Why are there changes to revert it back?” asked Democratic Sen. Angela Bryant, one of the few committee members who publicly quizzes the bill sponsors for explanations.

“Well, this goes on daily at municipal wastewater plants, at Duke Energy,” replied Sen. Andy Wells. “We know it’s going on.”

(Real Facts NC has video footage of this discussion.)

Arguably, it is not widely known how much untreated wastewater is discharged into surface waters and who is responsible for it.

Miller of DEQ could not comment to lawmakers about the amendment because, he said, “We’ve not been able to review it.”

Skeptical: Sen. Angela Bryant, a Democrat from northeastern North Carolina

Another amendment would reduce the number of seats on the Marine Fisheries Commission from nine to seven. The governor would still have the power to appoint the members, but like Republicans’ attempts to shrink the Court of Appeals and other governmental bodies they disagree with, this decrease is not as benign as it seems.

“In the last few years, most people believe the Marine Fisheries Commission has gotten out of control,” said Sen. Bill Cook, not defining “most people.” “They’re not basing decisions on science, but politics. Maybe this will encourage the commission to make better decisions.”

If that’s truly the case, then changing the statute to add scientists to the commission could solve the problem. Currently, there is only one: Mike Wicker, a biologist with the US Fish & Wildlife Service. His term expires on June 30, although Gov. Cooper could reappoint him.

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2017 Fiscal Year State Budget, Legislature, News

NC Senate leaders tout tax cuts, education spending in budget proposal

Senate leaders gave a broad outline of their proposed 2017-2018 budget Tuesday afternoon, saying it shares a lot of the same priorities as Gov. Roy Cooper’s proposal – but has different priorities.

The $22.9 billion Senate plan is an increase of about 3.75 percent over the state’s projected spending for this fiscal year, which ends in June. But it’s about $600 million less than Cooper’s spending plan.

“We have not forgotten the mess we found in 2011, the result of years of spending growth at unsustainable levels,” said Senate President Pro Tempore Phil Berger (R-Rockingham) in a Tuesday press conference. “We feel strongly that when government collects more than it needs, some of that money should be returned to the taxpayers.”

The Senate’s “Billion Dollar Middle Class Tax Cut,” passed last month, was a priority, Berger said.

Under that plan, Senate Bill 325, the state’s income tax rate would drop from 5.499 percent to 5.35 percent in the 2018 tax year. The standard deduction, or amount on which no income tax is owed – would increase from $8,750 to $10,000 for single filers and from $17,500 to $20,000 for those filing jointly.

The tax changes will result in $324 million less revenue in the coming fiscal year, around $710 million less in 2018-2019 and $775 million less by the 2019-2020 fiscal year.

Critics charge that the Republican majority in the General Assembly have slowed or reduced spending in key areas while building up a $580.5 million surplus. Reducing state revenues as dramatically as the Senate proposes is unnecessary when the state has pressing needs, Democratic lawmakers have argued.

But Berger and other Senate GOP leaders said Tuesday they believe citizens will use their money more wisely than government.

Senators also touted education spending outlined in the plan, pointing to increases in areas of bipartisan agreement.

Among them:

  • A pay raise for teachers of 3.7 percent.
  • A raise for most other state employees of $750 or 1.5 percent, whichever is larger. It was not yet clear Tuesday whether retirees will also see a cost of living increase.
  • $150 million in disaster relief funding for victims of Hurricane Matthew
  • Provisions for the “raise the age” initiative, which would send minors under 18 to juvenile courts when charged with a crime rather than trying them as adults. Berger called the change a priority and said the Senate would like to see it in place by 2020.

The full budget bill won’t be filed until late Tuesday night. On Wednesday multiple committee hearings will be held with the two required floor votes expected Thursday and Friday. The bill will then go to the House, where members say they would prefer more modest tax cuts.